A trade promotion lottery is when businesses run a competition to promote the business or product.
When the outcome of the competition is left to chance, the requirements set by the Office of Liquor, Gaming and Racing (OLGR) must be met.
This article is for businesses looking to promote their goods or services through a competition in NSW. It covers many of the fundamental considerations in conducting a trade promotion lottery – what you will need to do and what you can’t do.
Entry must be free
The first requirement is that entry and participation must be free, participants shouldn’t have to pay or redeem loyalty points. One exception to this is if entry into the competition is contingent on the participant having purchased goods or services from the business at their usual retail value.
If the purpose of the competition is trade promotion, then you need a permit.
You can apply for permits online, and you will need your ABN. It is important to note that other states may have different requirements for conducting a trade promotion lottery, so if you are running the competition outside of NSW, you should check with the relevant agencies.
Your application needs to include details about entering the competition, such as the conditions of entry, corresponding dates, process for notifying winners, claiming the prizes, tickets, and advertising material.
Permits are issued for a given period, up to 12 months. If your competition goes beyond this period, you need to lodge an amendment to extend the period.
Some people sign up for lotteries and then forget all about it! If, for some reason, you cannot contact the prize-winner, (and you’ve made every effort), you will need to keep the prize for three months. Once three months have passed, you can contact OLGR and request that the lottery be redrawn.
Alternatively, you can prepare for this situation by addressing it in your Terms and Conditions. If you explain what happens in the event of unclaimed prizes, then you will not need to wait three months before redrawing, and you will not require permission from OLGR.
Types of prizes
Some types of prizes require you to provide extra information to OLGR in your application. For example, travel prizes require you to let OLGR know how many people are entitled to take advantage of the prize.
There are also certain types of goods and services that you cannot allow as prizes. These included tobacco products, weapons, firearms, substantial amounts of liquor, or cosmetic surgery.
Conducting the lottery
Typically, your trade promotion lottery has three stages. These include:
- notifying people about the start and letting them know the rules;
- giving out the ticket and collecting entries from participants;
- closing the competition and announcing the winners.
Make sure you give enough time for each of these stages.
There are many considerations in running a trade promotion lottery. You must comply with the requirements given by OLGR, or you may face penalties. If you are trying to promote your business, it is important to get this right, or the promotional lottery may have the opposite effect on your business! Get in touch with LegalVision on 1300 544 755, and one of our business lawyers will assist.